• The city’s governmental activities cash balance at June 30, 2012, increased 68 percent, or approximately $2.5 million, from June 30, 2011.

According to the audit, the city’s cash balance for governmental activities increased $2.6 million – from $3.8 million to $6.4 million – from a year ago. The cost of all governmental activities this year was $12,715,901, compared to $18,627,701 last year, however the amount that taxpayers ultimately finances for these activities was only $10,740,053 because some of the cost was paid by those who directly benefited from the programs ($915,889) or by other governments and organizations that subsidized certain programs with grants and contributions ($2,626,795).

The audit found no major red flags, however did note some findings in its summary.

One item noted was the discrepancy in disbursements versus amounts budgeted for Public Works and Debt Service funds as well as Health and Social Services and Business-Type Activities funds before the budget was amended. The city issued the response that the budget will be amended before the over-expenditures occur in the future, if applicable.

There were no questionable disbursements or inappropriate use of travel expenses noted, however three business transactions between the city and city officials or employees were noted – all three were also noted on last year’s audit.

The audit showed payment to employee Darci Necomb for swimming lessons in the amount of $1,600; payment to Pritchard Brothers Plumbing, part-owned by City Councilman Gary Nystrom for supplies and repairs in the amount of $15,022; and payment to Darwin Backous, spouse of city employee Marla Backous, for contract maintenance at the library in the amount of $8,640.

The audit noted that the transaction with Newcomb does not appear to represent a conflict of interest “since it was lawful compensation for holding more than one city position,” and also noted the transaction with Backous does not appear to represent a conflict of interest since “they were entered into through competitive bidding.” The transaction with Pritchard Brothers Plumbing, however, was noted, with the audit saying it “may represent a conflict of interest since the transactions exceeded $1,500 during the fiscal year and not all transactions were entered into through competitive bidding.”

The city entered a response, as it did in its audit last year, stating that it believes “it is in the best interest of the City to continue using Pritchard Brothers Plumbing for pool repairs and Family Resource Center repairs” because the company “knows the history of these facilities and the equipment and has been doing the repairs prior to Mr. Nystrom’s election to the City Council.” It also noted that for other business, the city has a system in place it believes is fair that rotates repairs between all local plumbing companies.